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Monthly Archives: December 2010

Tomorrow is the 180-day deadline for my 1031 Exchange, can I get an extension?

Friday, December 31, 2010

The IRS wrote rules for 1031 Exchange that are very clear in this regard. You have up to 180 calendar days after the closing of your relinquished property (the property you sold) to purchase all of your identified replacement properties. Failure to close sale on all of your identified replacement properties could prevent deferment of [...]

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Will I have to pay capital gains tax if I don’t 1031 Exchange my property?

Friday, December 31, 2010

For you individual case, best to discuss this with your tax advisor such as a CPA or attorney. We can help you figure out what your capital gains tax would be on your sale, just visit our Capital Gains Estimator located at http://www.realtyexchangers.com/estimatecapitalgains.php. This tool was created specifically for taxpayers wondering if they will even [...]

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Does my property qualify for 1031 Exchange?

Friday, December 31, 2010

This is probably one the most asked common questions we get. While there a some exceptions, if the answer is Yes to BOTH of these questions, the the chances are high that your property qualifies for 1031 Exchange 1. Is you property Real Estate? 2. Is your property investment real estate such as land or [...]

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If I 1031 exchange into a rental, how long before I can live there?

Thursday, December 30, 2010

It’s a matter of facts and circumstances. For example, at the time of the 1031 exchange, you have no intention of converting it to your primary residence. But an unforeseen event, not related to the exchange, takes place. Perhaps the death of a spouse. Or the rental turns out to be an unbearable negative cash [...]

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How do we separate a house from our 1031 Exchange Replacement Property?

Thursday, December 30, 2010

If you are purchasing land through 1031 exchange for as your replacement property and the property includes a personal residence, you need to make an allocation of the substituted basis between the residence and the nominal land to be used as part of the residence and the remaining acreage to be held for investment . [...]

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Can land that is held in an irrevocable trust qualify for a 1031 exchange?

Thursday, December 30, 2010

Even if the buyer’s money would be put into a trust and the trustees would assume the trusteeship of the other’s trust and the beneficiaries of each trust would be swapped. There is not much we can do for you with a 1031 Exchange. The biggest problem with trusts, is that they get involved in [...]

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What is a 1031 Exchange Qualified Intermediary?

Wednesday, December 29, 2010

A Qualified Intermediary is a person (or company) who, for a fee, acts to facilitate the 1031 exchange by entering into an agreement with you for the exchange of properties. An intermediary is treated as acquiring and transferring property if: The intermediary acquires and transfers legal title to that property. The intermediary (either on its [...]

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How secure are my 1031 Exchange funds?

Wednesday, December 29, 2010

The security of your funds is not something you should have to worry about while completing your 1031 Exchange. For over 20 years now the safety of client proceeds is of highest importance to us.  Here’s what we’re doing about it. There are two primary areas of concern: 1. The Bank where client funds are [...]

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I want to do a 1031 Exchange but don’t understand why I cannot hold the funds in my bank?

Wednesday, December 29, 2010

The secret of a successful 1031 exchange is to avoid holding the money or other property during the transaction. If you receive cash proceeds during your 1031 exchange, you will not qualify for the capital gains deferment. While this sounds easy to avoid, it’s not. You must overcome the doctrine of “ constructive” receipt. The general [...]

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What the heck is the 1031 exchange “napkin test?”

Tuesday, December 28, 2010

Old time 1031 Exchange gurus use the term “napkin test” to describe the basic rule that all cash proceeds from the sale of the Relinquished Property must be “reinvested” in the Replacement Property to avoid recognized taxable gain from the exchange. If you trade up, and all the cash is “reinvested”, no taxable boot. But [...]

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